Just add management 7 steps to creating a productive

Just Add
Management
Seven Steps to Creating a Productive
Workplace and Motivating Your
Employees in Challenging Times

FARZAD DIBACHI
RHONDA LOVE DIBACHI

McGraw-Hill
New York Chicago San Francisco Lisbon London Madrid
Mexico City Milan New Delhi San Juan Seoul
Singapore Sydney Toronto


Copyright © 2002 by Farzad and Rhonda Love Dibachi. All rights reserved. Manufactured
in the United States of America. Except as permitted under the United States Copyright Act
of 1976, no part of this publication may be reproduced or distributed in any form or by any
means, or stored in a database or retrieval system, without the prior written permission of the
publisher.
0-07-141687-0
The material in this eBook also appears in the print version of this title: 0-07-140800-2
All trademarks are trademarks of their respective owners. Rather than put a trademark
symbol after every occurrence of a trademarked name, we use names in an editorial fashion only, and to the benefit of the trademark owner, with no intention of infringement of
the trademark. Where such designations appear in this book, they have been printed with
initial caps.
McGraw-Hill eBooks are available at special quantity discounts to use as premiums and
sales promotions, or for use in corporate training programs. For more information, please
contact George Hoare, Special Sales, at or (212) 9044069.

TERMS OF USE
This is a copyrighted work and The McGraw-Hill Companies, Inc. (“McGraw-Hill”) and
its licensors reserve all rights in and to the work. Use of this work is subject to these terms.
Except as permitted under the Copyright Act of 1976 and the right to store and retrieve one
copy of the work, you may not decompile, disassemble, reverse engineer, reproduce, modify, create derivative works based upon, transmit, distribute, disseminate, sell, publish or
sublicense the work or any part of it without McGraw-Hill’s prior consent. You may use
the work for your own noncommercial and personal use; any other use of the work is strictly prohibited. Your right to use the work may be terminated if you fail to comply with these
terms.
THE WORK IS PROVIDED “AS IS”. McGRAW-HILL AND ITS LICENSORS MAKE
NO GUARANTEES OR WARRANTIES AS TO THE ACCURACY, ADEQUACY OR
COMPLETENESS OF OR RESULTS TO BE OBTAINED FROM USING THE WORK,
INCLUDING ANY INFORMATION THAT CAN BE ACCESSED THROUGH THE
WORK VIA HYPERLINK OR OTHERWISE, AND EXPRESSLY DISCLAIM ANY
WARRANTY, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. McGraw-Hill and its licensors do not warrant or guarantee that the functions contained in the work will meet your requirements or that its operation will be uninterrupted or error free. Neither McGraw-Hill nor its licensors shall be liable to you or anyone else for any inaccuracy, error or omission, regardless of cause, in the work or for any
damages resulting therefrom. McGraw-Hill has no responsibility for the content of any
information accessed through the work. Under no circumstances shall McGraw-Hill
and/or its licensors be liable for any indirect, incidental, special, punitive, consequential or
similar damages that result from the use of or inability to use the work, even if any of them
has been advised of the possibility of such damages. This limitation of liability shall apply
to any claim or cause whatsoever whether such claim or cause arises in contract, tort or
otherwise.
DOI: 10.1036/0071416870


We especially want to thank our good friend, Joan Hamilton, for all of
her assistance, encouragement, and advice. She knows, more than anyone else,
that it would not have been possible without her.

This page intentionally left blank.


For more information about this title, click here.

Contents

Foreword by William J. Raduchel, CTO of AOL Time Warner

vii

Acknowledgments

ix

Introduction: The Myth of “It”

1

Chapter 1:

The Knowledge Work Murk

7

Chapter 2:

Getting the Basics Straight

27

Chapter 3:

Inspiring and Rewarding Employees

41

Chapter 4:

The Vision Thing

61

Chapter 5:

Doing What Matters

75

Chapter 6:

Figuring Out How to Do It Right Every Time

95

Chapter 7:

Progress Tracking

123

Chapter 8:

Working Smarter

145

Chapter 9:

The Diba Diaries

165

Chapter 10:

The Transparency Payback

189

Appendix: Checklists and Templates

201

Endnotes

221

Bibliography

223

Index

225

v
Copyright 2003 by Farzad and Rhonda Love Dibachi. Click Here for Terms of Use.


This page intentionally left blank.


Foreword

W

H E N I S T A R T E D W R I T I N G S O F T W A R E more than 40
years ago, it was an intellectual curiosity of limited practical application.
After all, what could you usefully do with much less computing power
than is in a modern digital watch? How times have changed! There are
very few—if any—material business projects today that don’t have crucial
dependence on software and information technology. Firms have evolved
from informal networks of informal systems communicating using imprecise protocols to complex, formal networks of complex, formal systems
communicating using precise protocols not only within the firm but with
customers, suppliers, and regulators. A firm, after all, is only an information system at its core. John Kenneth Galbraith foresaw all this in his
seminal The New Industrial State nearly 35 years ago.
Every company has its mavens, and these mavens can turn the corporate power structure upside down. In my experience, technology
befuddles many executives and leads them to managing it incorrectly.
There are many reasons for this, and I still find myself confused and
bemused when I witness it. Personal computers have turned millions

into self-proclaimed technology experts, and firms that would insist on
hiring a litigator with world-class experience for a major lawsuit are
more than willing to hand a complex system implementation to an
often-talented, but amateur, amateur. Partly it is because technology
experts frequently come across as difficult to fathom and manage. And

vii
Copyright 2003 by Farzad and Rhonda Love Dibachi. Click Here for Terms of Use.


viii F O R E W O R D

partly it is because business executives don’t like most of the laws of
physics that apply to technology and therefore often want the impossible. The maven phenomenon can also occur in nontechnical, but specialized fields such as international marketing or corporate finance—any
realm where the knowledge worker’s job mechanics are beyond the ken of
a manager. Tales of U.S. executives’ hiring a foreign manager primarily
on the person’s ability to speak English rather than a track record of
making money in that market are all too familiar.
As a result, in countless situations a shaky détente has been reached:
Tell the mavens what you need, leave them alone, and pray they deliver
(and augment that prayer with results-oriented compensation). Of course,
they often don’t deliver much more than tales of late and over-budget projects. Even more commonly, but less understood, project teams often
delete features to make the date, so you don’t get what you expected. By
cutting corners in software in particular, you end up with a product that is
less an asset and more a liability than anyone had intended.
Why does this happen? First and foremost, it does not happen
because the technologists or other mavens are somehow flawed. In my
almost universal experience, they are among the best, hardest-working
and most dedicated employees in the company. When you build systems, truth is an absolute and ambiguity is death. Second, it does not
happen because the business objectives are bad, although that is sometimes the case. Executives get to where they are because they have skills

and abilities, and they usually make the right calls.
As do the authors, I believe so many projects collapse because the
interface between the business executives and the mavens is flawed—
the mavens are managed poorly. They talk past each other. Meaning
well, they end up doing harm. I don’t believe in simple management
formulas, but I do believe every good executive has to have a theory of
how to do his or her job. What Farzad and Rhonda lay out here is the
foundation for effective, results-oriented technology management, and
I commend it to all with that need—which today means just about
everybody in any kind of organization.
William J. Raduchel
Executive Vice President
Chief Technical Officer
AOL Time Warner, Inc.


Acknowledgments

W

E THANK OUR FRIENDS,

colleagues, and most of all our
customers for helping us understand the many ways of managing
knowledge workers. Thanks to everyone at Niku, especially Mark
Moore, Stjepan Morovich, Jules Ehrlich, and Kurt Steinle. Thanks to
every person at every company who participated in all of our conversations that we had during the course of this project. Special thanks go to
Terry Ash, Robert Atkinson, Tom Berquist, John Birge, Carol Bobbe,
Volkhard Bregulla, Phil Brown, Stephen Cooke, John Elliott, Dave
Ewert, Frank Gill, Joe Gillach, Harriet Girdley, Arnold Goto, Fred

Jewell, Brendan Kennedy, Licia Knight, John Lambeth, Geoffrey Lawson, Bill Lehrmann, Bill Leonard, LeeAnne Lewis, David Meridew,
Leslie Mullis, Jo Myland, Dave Phillips, Bill Raduchel, Dave Raspallo,
Stuart Read, Debbie Russell, Steve Saba, Bob Schwartz, Nancy
Simonson, Ed Soladay, Bill Stewart, Peter Thompson, Dave Veach,
Bernhard Vieregge, Maynard Webb, Richard Whelchel, Jeremy
Wilkes, and Paul Yaron for being so generous with their time and sharing
so many useful insights.

ix
Copyright 2003 by Farzad and Rhonda Love Dibachi. Click Here for Terms of Use.


TE

AM
FL
Y

This page intentionally left blank.


INTRODUCTION
The Myth of “It”

T

H E F A L L O F E N R O N , the Houston-based energy-trading
company that flamed out in 2001, is an amazing debacle. Reading
about its decline, we were struck particularly by the words of the company’s former CEO Jeff Skilling as quoted in a BusinessWeek article:
“There were two kinds of people in the world: those who got ‘it’ and

those who didn’t.”1 Ultimately, though, nobody—not even the company’s chairman or its board of directors—could explain or justify the
shaky and sketchy offshore and off-book partnerships Skilling and his
team created that crashed and brought Enron down with them. Enron’s
financial staff operated in a maverick and unaccountable fashion. As
the stock value plunged into the pennies, everybody got “it.” “It” was a
house of cards.
Business is currently recovering from its rocket ride through the
get-it decade. Thank God it’s over. The get-it cults that sprung up in
the supposed New Economy exacerbated a problem that’s been plaguing business for decades—namely, the challenge of managing workers
whose output isn’t measured in the goods they produce or the sales they
book, but rather in the value they create by manipulating knowledge.
It’s an arena where many workers pride themselves on the creativity and
individual solutions they bring to their daily challenges. They chafe at

1
Copyright 2003 by Farzad and Rhonda Love Dibachi. Click Here for Terms of Use.


2

JUST ADD MANAGEMENT

attempts to make them accountable for their work. Whether the business is books or electronic trading of electricity, they like to talk in
terms of cleverness, thinking outside the box, and the qualitative genius
they bring to the endeavor. Trust us, they say. We get it.
We heard it from high-wire-artist executives like Skilling. We heard
it from tech types who couldn’t be bothered to explain what they were
doing in terms a normal person could understand. But the most damaging fallout of this swaggering sentiment was its grip on managers of
millions of knowledge workers. It’s very difficult to manage knowledge
workers. It takes sensitivity and flexibility and smarts—but it also

requires enforcing basic business processes whether the field is finance,
law, business development, customer service, marketing, options trading, or information technology. Unfortunately, as the get-it chants grew
among the knowledge legions embracing all kinds of new technology
and fueled by a booming economy, managers surrendered and gave up.
They began relying on heroics to get the job done, rather than standard, repeatable processes. And like Skilling, many developed a taste for
risk that ultimately betrayed them.
Enron’s collapse is just one example of the fallout. Scores of Wall
Street traders and analysts are under the microscope for questionable
practices that developed in a largely unsupervised, booming market. IT
managers who were given blank checks to do whatever “it” took to
bring a company into the Internet Age are now digging out from under
a mountain of poorly understood, often dysfunctional technology they
bought in a panic. The dot.com legions whose profits-optional ideas
were supposed to reinvent the universe all claimed to “get it.” Billions
in invested capital later, such names as Webvan, Excite, and Yahoo are
now more synonymous with broken dreams than with revolutionary
business ideas. Humility has come at a heavy price.
All these situations are dramatic management failures. In a more
insidious form of failure, however, a lack of good management means
businesses large and small around the world continue to experience lags
in productivity, delays in their responsiveness to new opportunities,
duplicative and unproductive initiatives, wasted resources, and a generalized frustration. Intensifying the problem are the complexities introduced by the advent of far-flung virtual teams and the sheer volume and
velocity of information flowing through even the most mundane business operations these days.


The Myth of “It”

3

Farzad’s background is in software development. He’s managed

divisions at Tandem Computer and Oracle Corporation, and he has
started up two software companies. Rhonda is an operational executive
who has managed some of the most challenging knowledge workers of
all—software programmers—with great success. Because of the nature
of the systems with which we’ve been involved, we have unusual
insight into the habits and culture of the knowledge workers in today’s
business world. We also have some battle scars: In Farzad’s last startup,
his flirtation with “management by getting out of the way” (illuminated in some detail in Chapter 9) didn’t work. The experience
changed the way we’ll do business forever.
We have written this book because of a confluence of two strongly
held beliefs. The first is that technology has evolved to an exciting
point. In the last couple of decades two enormous business sectors—
manufacturing and sales—have experienced tremendous new efficiencies and planning capabilities thanks to so-called enterprise software
programs designed for enterprise resource planning (ERP) and customer
relationship management (CRM). Now gains of similar magnitude are
imminent in the far less quantitative knowledge workplace as well. Even
more exciting, these methods stand to finally deliver the long-promised
benefits of using systems to help people work smarter too.
Our second belief is that, to reach this last major productivity frontier to take advantage of these new tools, managers of knowledge workers must take charge. Today, too many managers of knowledge workers
are paralyzed by myths about what it takes to get and keep the best people. Managers often behave as if they are afraid of their own workers.
They are stumped by such laments as, How can you attack productivity
in an environment in which quality, not quantity, is important? How
can you hold a legal department facing a wide array of unique situations
to productivity metrics? How can you subject a marketing strategy
group charged with developing breakthrough, creative campaigns to
such notions as process and on-time delivery? How can employees who
never directly see a customer be expected to think about how their work
affects the people who pay their salaries?
The more the economy contracts, the more imperative it becomes
that businesses not neglect any component of their cost or productivity

equations. Service and middle-company functions represent an enormous chunk of American business, employing almost 60 percent of the


4

JUST ADD MANAGEMENT

workforce.2 However, studies have shown that while manufacturing
productivity has increased by over 50 percent in the past 10 years, productivity in the internal service sectors has remained flat.3
Knowledge workers’ productivity is a huge competitiveness issue.
Attacking it goes way beyond just hiring smart people. The best people in
the world, if not properly managed, cannot produce the results it takes to
drive an enterprise forward on a consistent basis. What most of us need
are systems and strategies for managing and maximizing the value of
workers who occupy the vast middle ground between lousy and brilliant.
We need approaches to managing our knowledge workers that focus
them on doing what matters in a timely way. Only after the basics are
achieved can we afford to invite the A+ employees—a minority in any
mid- to large-sized enterprise, and probably in most small companies—
to dazzle us with their cutting-edge ideas and pursue high-risk–highreward endeavors independently.
What we have learned in the last several years of developing and
marketing a software suite designed to help companies in nearly every
industry, from manufacturers of pharmaceuticals to motorcycles, is that
there is a great desire out there to turbocharge the knowledge workforce but there is also a lot of confusion about how to do it. In hundreds
of hours of conversations with customers, we have learned that executives and managers are pulling out their hair in frustration. They don’t
know what their knowledge workers are doing. They can’t quantitatively measure their progress. They don’t have a clear picture at any
point in time of how things are going, whether projects are truly on
track, and whether resources are being deployed on the projects that
really matter. These knowledge gaps lead to all kinds of related problems: Managers can’t justify their budgets, they can’t take advantage of
new opportunities quickly or respond to problems or crises effectively,

and they can’t even scale back their operations when times demand it,
because they don’t know who’s doing what.
This book can help managers turbocharge the knowledge workplace.
Whether you are a CEO or a manager deep in an organization, the prescription to help you better understand and drive your organization is
the same: Demand accountability and maturity from workers, and systematically organize the knowledge workplace to start delivering more
consistently, more efficiently, and more predictably. We are hopeful that
our dual perspectives—as a CEO and as an operational executive—will


The Myth of “It”

5

provide both a practical and realistic sense of how to run an accountable
organization in which senior executive “drive-bys” are rare and in which
knowledge workers focus on doing what matters and on doing it right.
What we outline in this book is a two-step process designed to
achieve a critical corporate goal: transparency. Transparency exists
when every member of an enterprise understands what his or her role in
the greater scheme is; understands how his or her work influences the
success of the enterprise; makes good decisions based on priorities set at
a high level; and taps into the knowledge assets of the company in order
to achieve corporate goals.
Achieving transparency first demands that managers establish and
enforce a mature, professional workplace culture focused on results. We
call it adult supervision.
Second, the adults need to use time-tested, proven management
techniques that too often are ignored in the knowledge environment.
We call that accountability management. Managers need to set and broadcast priorities. They need to agree upon and enforce processes. They
need to track employees’ progress and make them accountable. And

they need to support this accountability management system with
knowledge tools that provide accurate, timely business data that help
the organization work smarter. These techniques provide the mechanics of visibility—data-driven insight into who’s doing what, and how
they’re doing.
The first three chapters of our book speak to the cultural underpinnings of an accountable, productivity-oriented workplace. We’ll run
through some realities and myths of today’s knowledge workplace.
We’ll introduce you to some of the archetypes who populate knowledge
workplaces such as Amadeus, the artiste; Jock who wants to “just do it”;
Darth Maul, the Sith Lord, who says little and may save your bacon—
or go postal. While we have some fun with the stereotypical characters
and behaviors that lurk in the knowledge workplace, we believe that
managers must set the right tone in the office for every employee, every
day. Only then will employees be primed to embrace transparency, a state
of high alert inside a knowledge organization in which every employee
develops a sense of the big picture.
We’ll spend the second half of the book focused on the key tactical
steps you can take to organize and attack inefficiencies in the knowledge
workplace: portfolio alignment, process development, progress tracking,


6

JUST ADD MANAGEMENT

and knowledge management. You can use the sample worksheets in the
appendix to help you in this mission, or you can download electronic
versions of the worksheets off our Web site at www.niku.com.
A mature organizational philosophy is crucial to getting companies
back on track. For its next leap forward, business needs to reconnect
with some basic fundamentals that have been lost in all the hype and

foment of the last few years. Without adults in charge, all the nifty tools
are just expensive toys for technocrats and child prodigy computer
geeks. We are going to lay out a method for you to marry brilliantly
simple management concepts proven to work, with tools that will give
your enterprise wings.


CHAPTER

1

The Knowledge
Work Murk
In this chapter we discuss the knowledge workplace, the
business world’s last major productivity frontier. We
sketch some new realities of this technology-savvy and
information-rich business arena, and we expose some of
the myths that prevent managers from demanding the
appropriate accountability from this workforce.

T

of a large financial
services company came to us recently with a story the poor bloke
thought was unusual. We’ll call him Chuck.1 A couple of years ago,
Chuck landed what he thought was going to be his dream job. The firm
he was joining had enjoyed a lot of positive notoriety in a very hot sector. It was a big step up from his last position—he’d be managing more
people, for more markets, from a posh office in a Manhattan skyscraper.
He stepped out of the elevator with a spring in his step on his first
day and was met by his boss, the chief operations officer (COO), in the

corridor. His boss hurriedly pulled him into a conference room and
shut the door. The COO admitted he was nervous about a certain project. It was known as the “Decimalization Project,” or “D Project.” The
major U.S. stock exchanges were going to switch from fractional
H E C H I E F I N F O R M AT I O N O F F I C E R

7
Copyright 2003 by Farzad and Rhonda Love Dibachi. Click Here for Terms of Use.


8

JUST ADD MANAGEMENT

reporting to decimal reporting in early 2001. The company had only a
few more months to complete the retrofit of its trading systems and
client reporting systems. The stakes were huge: The company needed
to make this deadline in order to stay in business after the switch. The
COO told Chuck that he needed to guarantee the D Project would
come in on time.
His top priority now crystal clear, Chuck went off to find his office.
Chuck began asking his reports a short list of simple questions: Give
me a list of everything we’re working on around the world. I want to
know what kind of financial and personnel resources we’re deploying
on each of these initiatives. And I need the completion targets. His
intention was to evaluate the resource deployment and move bodies to
the highest-priority initiatives.
Chuck’s new domain included over 1000 of the firm’s employees—
the lion’s share of its personnel resources. Immediately, half of his
reports lined up outside his door toting PowerPoint presentations.
These slides carried all kinds of information. Literally. There were indepth explorations of the obvious that took 45 minutes to review. There

were market research reports and morale-boosting slides full of slogans.
They told him about the cultural idiosyncrasies of foreign offices, and
reminded him of the firm’s access to great seats for the Knicks’ games.
They handed him incomplete lists of names of people working on initiatives. They handed him spreadsheets providing a crystal clear view of
what the company agreed to spend 8 months ago—but no expenses
pegged to actual outlays spent on initiatives to date, nor estimates of
what it would take to complete them.
That was half of his organization. The other half of his organization
didn’t respond at all, and when he went to them, “They were surly,”
recalled Chuck. They seemed to resent the questions. When he mentioned the D Project, some of them openly snickered and said they
wouldn’t touch it with a 10-foot pole. Yet, as he looked around his operation every day, he saw no slackers or loafers. Everyone looked busy,
some to the point of red-eyed exhaustion.
After a week of this, Chuck was dumbfounded. Nobody could give
him a list of initiatives, resources, and completion targets. Nobody had
a meaningful sense of the big picture. Those above him referred
vaguely to the need to kick some ass . . . (We like to call this kind of shallow, unhelpful, often barked advice a “ CEO drive-by shooting.”)


The Knowledge Work Murk

9

Those below him were mired in the details and were responding like
firefighters to every request from anyone up the ladder. They were running around in circles, not getting anything finished. There was no
widely shared sense of corporate priorities. Chunks of initiatives were
described simply as in “development phase” in the charts ostensibly
designed to keep everyone on track. Some of those “phases” had gone
on for months.
And the decimalization clock ticked away. The COO was looking to
Chuck for a timeline and a guarantee, but Chuck could not get a

straight answer to whether the internal decimalization project was on
schedule or whether it needed more resources.
Managers would reply: “More resources? Sure, I’d love to have
more resources. I didn’t realize that was in the budget.”
The budget wasn’t the question. The question was: What do you
need to bring this in on time? The managers had no idea.
Without any big-picture sense of where they were and what they
needed, his managers could not guarantee to Chuck that the deadline
was achievable. What was he to do? The COO was looking to him to
deliver the D Project in time for the market switch. He couldn’t get
anyone in his organization to say that it was possible or to show him a
believable plan to get there. So Chuck had to bring in a third party for
over half a million dollars to analyze the efforts and act as a SWAT team
to shore up cracks in the plan.
In the end, the decimalization project barely came in on time, and it
came in with a hefty price tag because of the detective work required to
get internal efforts in shape, additional consultant fees, and additional
people the company had to deploy to make it happen.
Chuck was convinced he’d joined the most dysfunctional organization in town. We assured him it was just another day at the office in the
knowledge workplace.

What Is the Knowledge Workplace?
The knowledge workplace is the vast array of work and services inside
companies that can make or break an organization but that are not
related to manufacturing or sales. In those arenas, output, productivity,
and success can be expressed in very specific metrics such as sales, or
low defect ratios, or gross production numbers.


10

JUST ADD MANAGEMENT

TE

AM
FL
Y

The output of the knowledge workplace, however, tends to be far
more difficult to quantify and describe. Knowledge workers are sometimes erroneously thought of as just technical, heads-down types who
work on a keyboard all day. In fact, knowledge workers include a wide
variety of functional specialists who perform services. Hypermeticulous
attorneys. Groovy, multiply pierced advertising copywriters. Analysts
trying to match up the nuts and bolts of a business with its prospects.
Business development executives who spend all their time in the field
looking for interesting possibilities. Financial people closing the quarter’s books and assembling complex reports. Legions of programmers.
What they have in common is that their work tends to be grounded in
the gathering, analysis, manipulation, transformation, and presentation
of information. What they also have in common is their enormous collective impact: Knowledge workers make up almost 60 percent of the
workforce.2
The knowledge workplace also often is characterized by teams working on activities that require multiple contributions. For example, a goal
is articulated, a team is assembled, a challenge is formulated—and then
there is a murky period of waiting and percolating. Ideally, it’s followed
by the realization that the efforts of a team have gelled into a compelling,
successful initiative or service or deal or campaign or strategy. These
may include a comarketing deal with a major company. A blockbuster
computer game. A new recruiting plan. A fully subscribed investment
partnership. A 24 percent reduction in customer complaints.
Or sometimes it’s followed by a big mess. Just as common is the discovery that an organization has just wasted precious time, human capital,

and financial resources on a poorly defined activity, an impossible
dream, or a program of dubious value, in which efforts were wasted and
vision and reality were going in opposite directions.
What separates the first scenario, the successful one, from the second, we believe, is management. Management can’t always overcome a
bad idea, but it can spot one early and change the direction or end the
initiative before vast amounts of money and time are wasted. Successful
companies find a way to more consistently deliver knowledge-based
work and manage business value than unsuccessful companies. That
sounds obvious. But the fact is that best practices of those successful
companies, and the mechanisms used in those successes, have not been
embraced widely. Across the landscape of business, the productivity


The Knowledge Work Murk

11

gains of knowledge workers have dramatically lagged improvements in
manufacturing productivity for decades. Over just the last 10 years, for
example, studies show manufacturing productivity has increased by
over 50 percent, while service productivity has remained flat.3
So, are knowledge workers already operating at some prime level of
efficiency? No. Look at Chuck’s Decimalization Project. This was not a
dysfunctional organization barely hanging on. This was a vibrant business
that had made dramatic inroads into lots of exciting new segments of
financial services. Within the past year, this company had entered into five
new international trading markets. This was a thriving and dynamic organization that was attracting fresh talent, like Chuck. It was supporting a
growing business model. It was responding to new challenges. But the D
Project exposed to Chuck the company’s disorganized, unaccountable
underpinnings that he grew to realize characterized its entire culture.

We spoke with Chuck about 4 months after the completion of the
decimalization project. Chuck was only then starting to recover from
the effort it took to manage that monster. He wanted to know if Niku
could help him get some visibility into his organization across the
board. Chuck had discovered that his people were good at developing
new products, where it’s easy to establish a sense of teamwork and esprit
de corps and a clear goal. But that’s a honeymoon activity. Long-term
success is about keeping the excitement going while you’re also divvying up the household chores, rocking cranky babies to sleep at 2 A.M.,
and agreeing to live within your means.
Chuck couldn’t even begin to manage toward a balanced, productive
state because basic questions could not be answered: Who was doing
what? What will suffer if we remove the Alpha team’s current responsibilities and shift them to the D Project? How many team members’ initiatives are close to completion? Which long-range efforts we can safely
postpone?
The Decimalization Project, like a number of challenges Chuck’s
group was facing, was not rocket science. But it involved managing
workers who had to be forced to work as a team, share information, and
execute their tasks in a serial fashion so the project could move forward.
That’s where things broke down. This project wasn’t creative, ultracool
stuff. It was tedious infrastructure work. There were other things many
of the employees would rather do, many of them off on their own where
they didn’t have to meet schedules and answer to the guys in suits. And


12

JUST ADD MANAGEMENT

because there was no central repository for information tracking and
monitoring the progress of this project, nobody had a handle on how
far the teams had progressed—or whether they’d meet their deadlines.

Sadly, Chuck’s is a common lament. Knowledge managers are not
getting the visibility they need into their organizations for two reasons:
First, they haven’t established a mature, professional culture. This has
been a get-it culture, and those who have believed they had “it” considered it beneath them to report on any regular basis in any regular way
how things were going. Second, managers buy into the fallacy that the
same management processes used in quantitative fields such as product
design and manufacturing won’t work in the knowledge arena because
every task is unique. In companies like Chuck’s, there is an appalling
lack of information on priorities and progress and little information
about who is doing what and for what reason. Without this basic information, managers like Chuck find it almost impossible to make the
basic decisions necessary to run their organizations.

Management Challenges in the Knowledge Workplace
In our careers, we have worked on initiatives that were designated high
priority inside such major companies as General Electric, Tandem
Computer, Oracle Corporation, and Arthur Young. We say “designated” because despite all the slogans and CEO drive-bys, it’s extremely
common for knowledge work to be managed like some kind of artists’
colony, where managers assemble a team, throw out a challenge, hope
for the best, and return shortly before the deadline, holding their breath
and fingering their rosary beads. That’s bad enough, but an additional
problem is that nobody locks the door to the colony. After issuing the
orders, it’s also perfectly common for wave after wave of senior executives to come knocking, asking for help and attention from individual
team members for all manner of other activities and initiatives, rationalizing the interruptions to the big initiatives with the assurance that
this “won’t take much time.”
When you are tempted to indulge in drive-bys like “Fix the Web
site. It stinks,” remember that if senior executives plucked workers off
an assembly line at random times and asked them to perform illdefined, low-level tasks, it would probably take less than 24 hours for all
hell to break loose: The decline in widget production would expose this

The Knowledge Work Murk

13

problem, and the behavior would stop. But since knowledge work takes
time and the workers aren’t asked to be accountable on any given day,
interruptions and tangential work can suck the life out of an initiative.
These challenges are widely perceived and painfully experienced by
thousands of companies. In fact, improving the management of knowledge workers has been designated as one of the most significant modern business challenges by management gurus such as Peter Drucker,
who has stated that management’s most important contribution during
the last century was that manual workers in manufacturing increased
their productivity 50 times. Drucker thinks that management’s most
important contribution for this century will be to raise the productivity
of knowledge workers by a similar, staggering amount.4
A poorly managed knowledge workplace can become like Peter
Pan’s Island of Lost Boys. The knowledge workers are often very smart,
very motivated, hard-working people. But despite conventional wisdom
that those qualities are sufficient, when they’re left on their own, they
often become frustrated at the lack of clear direction and well-articulated priorities. These employees adopt a resentful independence, convinced that they are misunderstood and underappreciated. They work
on the tasks that most interest them, and because they do have specialized skills and knowledge much of the time, it’s very difficult to sort out
what many of them are doing on a daily basis. “Working on stuff,” “analyzing these numbers,” “doing research,” are all truthful descriptions of
their activities, sadly just as truthful when they are doing those things
for high-value initiatives as for low-value interruptions or even actions
unrelated to their job—like developing ideas they believe will impress
the bosses and get them out of their current job, communicating with
friends, or playing games. If management has not used a disciplined
approach to monitoring their time and progress, entire initiatives can
go up in flames before individuals working at cross purposes are
exposed.
At Chuck’s company, previous managers had dropped the ball in two

ways. First, they surrendered to a loopy notion rampant in the knowledgeworker arena today that all you have to do is hire the smartest people
you can possibly find, and just get out of their way. In this particular
case, the Decimalization Project (D Project) was largely dependent on
large groups of young software programmers who, at the time this project was underway, were commanding six-figure salaries in their first few


14

JUST ADD MANAGEMENT

years out of college, despite having little maturity, business experience,
or sense of accountability.
The hands-off attitude and the youth and inexperience of the workers led to the company’s developing an immature, bifurcated culture.
There were top managers who wanted only results and would just as
soon not mingle with those curious youngsters with the tattoos and big
clunky shoes. And there were talented, lower-level employees who
didn’t understand or care about the viability of the whole organization
and their role within it. There were plenty of smart people in Chuck’s
company, but their managers got way too far out of their way. They
stopped managing and started hoping and praying they’d hired people
who “got it” and would deliver the goods.
Secondly and not surprisingly, because they stepped out of the way,
the managers didn’t impose a small handful of straightforward and fundamental points of discipline on knowledge work. They didn’t assemble
a clear list of programs and align them with their priorities; they didn’t
establish processes that could be cloned all over the company to dispatch D Project as efficiently as possible; and they didn’t demand
accountability. They allowed “stuff” to serve as the answer for what
people were working on, and “in process” to substitute for a quantitative progress metric. The upshot was that management didn’t know
what people were working on, or how resources were actually being
deployed. Middle-level managers were caught between trying to
appease the top brass, and alienating the hard-working but independent

and headstrong workers they needed to get the work done.
We were all too familiar with the nature of the workplace Chuck
had walked into. Farzad and his brother Farid started a company called
Diba with a team of hotshot computer guys, and they had the “hire-thebest-and-let-’em-rip” mentality. There is of course some truth in that
sentiment. You can’t hire very intelligent people and then micromanage
them to the point where they can’t relax and do their jobs. You can’t fill
their days with so much bureaucracy they can’t be productive. But you
also can’t get sucked into thinking that because you paid top dollar for
an employee, he or she knows best and so you’d better be prepared for
surly grunts when you ask how things are going.
One reason the get-it cult tends to flourish in a knowledge workplace is that most CEOs hate to be bogged down in detail. And without
a lot of hard metrics, the detail that attends knowledge-driven work